Assignment 1

Additional information

1. P Ltd acquired the interest in S Ltd on 30 June 2009 when the equity of S Ltd was as follows;

   Share Capital $50 000

   Retained earnings $17 500

2. On 1 January 2010, S Ltd sold non-depreciable fixed property with an original cost price of $25 000 to S Ltd for $28 500. The property is classified as property, plant and equipment and still in possession of S Ltd.

3. On 30 June 2011, S Ltd sold furniture that cost $6 250 and on which accumulated depreciation to the amount of $1 250 was recognized to P Ltd for $5 000. P Ltd classifies this furniture under property, plant and equipment.

4. S Ltd purchases all its inventories from P Ltd at cost price plus 25%. Total inventories to the value of $37 500 were sold to S Ltd by P Ltd during the reporting period. Inventories in the records of S Ltd were $12 500 on 1 July 2011. At the end of the reporting period, S Ltd owed P Ltd $11 500 in respect of the inventories purchased from P Ltd. These amounts are included in trade receivables and trade & other payables.

5. On 30 June 2010, S Ltd sold 2 machines with a carrying amount of $9 000 each to P Ltd for a total amount of $20 000. P Ltd uses the plant in the production of inventories. Both companies write off depreciation on plant at 20% per annum on the diminishing balance method. On 29 June 2012, P Ltd sold one of the machines at a slight profit that was set off against other expenses.

6. Assume that the identifiable assets acquired and the liabilities assumed at acquisition date are shown at their acquisition-date fair values, as determined in terms of IFRS 3.

7. P Ltd classified the equity investment in S Ltd under IFRS 9 in its separate financial statements and recognized fir value adjustments in a mark-to-market reserve (other comprehensive income).

8. P Ltd elected to measure any non-controlling interests in an acquiree at their proportional share of the acquiree's identifiable net assets.

9. Ignore deferred tax implications

   Required

   Prepare the following consolidated statements for the P Ltd Group for the reporting period ended 30 June 2012.

1. Consolidated statement of financial position 22 marks

2. Consolidated statement of changes in equity 7 marks

3. Analysis of owner's equity 11marks